Exhibit 10.18
CONTRIBUTION AND UNITS PURCHASE AGREEMENT
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THIS
CONTRIBUTION AND
UNITS PURCHASE AGREEMENT (this
"Agreement") is made
and entered into as of May 5, 2006, by and between Micron
Technology, Inc.,
a Delaware corporation ("Micron"), Photronics, Inc., a
Connecticut
corporation
("Photronics"), and MP
Mask Technology Center, LLC, a
Delaware limited liability company (the "Company").
WHEREAS, Micron
formed the Company to serve as the legal
entity for a joint venture (the "Joint Venture") between Micron and Photronics
for the development, fabrication and sale of advanced photomasks
(the "Photomask
Business").
WHEREAS, in furtherance of establishing the Joint Venture, and
in connection with the
execution of the
Limited Liability
Company Operating
Agreement of MP Mask Technology, LLC (the "LLC Operating
Agreement") to be dated
as of the Closing Date (as defined below), by and between Micron
and Photronics,
Micron desires
to contribute hereunder as of the Closing Date (the
"Contribution") to the Company the assets set forth on Schedule A
hereto, which
Schedule may be updated upon the reasonable agreement of Micron and
Photronics,
consistent with Section 6(h) below (the "Transferred Assets"), subject to the
terms and conditions
contained in this
Agreement, in exchange
for 100% of the
membership interests (the "Membership Interests") of the
Company.
WHEREAS,
immediately following
the Contribution, Micron
desires to sell 49.99% of all of the Membership Interests,
represented by 49,990
units (the "Transferred Units"), of the Company to Photronics,
and Photronics
desires to purchase such Membership Interests from Micron, pursuant
to the terms
and conditions of this Agreement.
WHEREAS, at the
Closing, Micron and
Photronics
shall enter
into the LLC
Operating Agreement to set forth the respective rights and
obligations of Micron
and Photronics
with respect to the
Company, and,
along
with the Company,
certain other Transaction Documents, as listed on Schedule B
hereto.
NOW, THEREFORE,
in consideration of the promises set forth
herein and
for other good and valuable consideration, the receipt and
sufficiency of
which is hereby acknowledged, the parties hereby agree as
follows:
1. Contribution.
(a) General.
On the terms and subject to the conditions
contained in this Agreement, Micron shall convey, assign,
transfer and
deliver
to the Company, and
the Company shall
acquire on the Closing
Date (as defined
below), all of
Micron's right, title and interest in and to its ownership
interests in the Transferred Assets, subject to Permitted Exceptions
respecting
only the real property located at 3851 E. Columbia Road,
Boise, Idaho (the "JV
Plant"), and no
other Micron assets whatsoever, in exchange for 100,000
membership units of
the Company (the
"Units"). "Permitted
Exceptions"
shall
mean: (a) the lien of
all ad valorem real estate Taxes (as defined below) due
and payable in the calendar year 2006 and subsequent
<PAGE>
calendar years;
(b) all matters of record relating to the JV Plant in the
official records of
the county in which
such real property
is located; (c)
local, state and
federal laws,
ordinances or governmental regulations and the
like, including
but not limited to
building and zoning
laws, ordinances
and
regulations, now or
hereafter in effect
relating to the JV Plant; and (d) any
matters that would be
shown on an accurate
survey of current date of the JV
Plant.
(b) Contribution
Closing. The closing of the contribution
transactions provided
for in this Agreement (the "Contribution Closing") shall
take place at the offices of Micron at 8000 South Federal Way,
Boise, Idaho at
the opening of business on May 5, 2006 (the "Closing Date"). At the
Contribution
Closing, Micron shall
deliver to the Company deeds, endorsements, assignments
and good and sufficient instruments of conveyance, transfer and assignment as
are necessary,
appropriate
and effective to vest in the Company all of the
right, title
and interest of Micron in and to the
Transferred
Assets and,
simultaneously with
such deliveries, Micron shall take such steps as are
necessary to put the Company in actual possession and operating
control of the
Transferred Assets.
On the Closing Date,
the Company shall issue to Micron the
Units, which shall be fully paid and nonassessable.
(c)
Assumption
of Liabilities. Effective as of the
Contribution Closing,
the Company will assume and perform and in due course pay
and discharge the following liabilities: (i) any liabilities arising out of
or
based upon events or
circumstances
occurring after the
Closing in
connection
with or resulting
from the operation of the Company's business, including
product warranty claims made with respect to the sale of products
by the Company
after the Closing,
whether or not such products were manufactured prior to the
Closing; (ii) any
liabilities
set forth on Schedule C; (iii) any other
liabilities
explicitly
assumed under
the provisions of the Transaction
Documents; and (iv) any liabilities relating to the Transferred
Assets that were
not Known by Micron as of the Contribution Closing (collectively, the "Assumed
Liabilities"). At the
Contribution Closing, the Company shall deliver to Micron
appropriate assumption agreements as are necessary, appropriate and
effective to
assume the Assumed Liabilities. Following the Contribution Closing,
Micron shall
use reasonable efforts to assign and transfer all its rights, title
and interest
in, to and under any Assumed Contracts. To the extent any Assumed Contract
(as
defined below) is not capable of being transferred, assigned or
conveyed without
the consent or waiver of a party thereto (other than Micron or an affiliate
of
Micron) or any other third party (including governmental
authority), or if
such
transfer, assignment
or conveyance would constitute a breach thereof or
violation of Applicable Law, this Agreement shall not constitute a transfer,
assignment or
conveyance
thereof, and Micron shall hold any such Assumed
Contract for the benefit of the Company.
(d) Prorations.
On the Closing Date, or as promptly as
practicable following
the Closing Date,
but in no event later
than sixty (60)
calendar days thereafter, the water, gas electricity and
other utilities, local
business or other
transferable
license or permit fees, and other similar
periodic charges
payable with respect to the Transferred Assets shall be
prorated between
Micron and the
Company, with Micron bearing such costs and
expenses attributable
to the period through
and including the day prior to the
Closing Date, and the Company bearing such costs and expenses
attributable
to
the period after the day prior to the Closing Date.
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**** Material omitted
pursuant to a request
for confidential
treatment under
Rule 24b-2 of the
Exchange Act of 1934.
Material filed separately with the
Securities and Exchange Commission.
<PAGE>
(e) Taxes. Except as otherwise provided in this Agreement, (a)
all Taxes (other than transfer Taxes) in respect of the
Transferred
Assets for
the period or portions
of periods ending at or prior to the day
prior to the
Closing Date shall be borne solely by Micron ("Micron Pre-Closing Taxes"). For
purposes of the
foregoing, any Taxes
that are imposed on a periodic basis and
are payable for a Tax period that includes (but does not end on) the day
prior
to the Closing Date (a "Straddle Period"), the portion of such Tax that
relates
to the portion of such Tax period ending on the day prior to the
Closing Date
shall (A) in the case of any Taxes other than Taxes based upon or related to
income or receipts,
be deemed to be the
amount of such Tax for
the entire Tax
period multiplied by a fraction, the numerator of which is the
number of days in
the Tax period ending
on the day prior to the Closing Date and the denominator
of which is the number of days in the entire Tax period,
and (B) in the case
of
any Tax based upon or
related to income or
receipts, be deemed equal to the
amount which would by
payable if the relevant Tax period ended on the day prior
to the Closing Date.
For purposes of this
Section, all relevant periods in
respect of personal
property, real
property and similar
Taxes imposed by
the
State of Idaho shall be treated as beginning after the day prior to the
Closing
Date, and such Taxes in respect of the Transferred Assets shall be paid by the
Company. Micron shall
pay to the Company, within fifteen (15) days prior to the
date on which Taxes are due with respect to Straddle Periods,
that amount equal
to the applicable
portion of such Taxes
which relates to the portion of such
Taxable period ending on the day prior to the Closing Date.
Except as
otherwise
provided in this Agreement, all Taxes in respect of the
Transferred Assets
for
the period
or portions of periods beginning after the day prior to the
Contribution Closing
shall be borne by the
Company or, to the
extent that the
Company is taxed as a flow-through entity, with respect to income or
franchise
Taxes, by the Members.
"Tax" means all taxes, levies, imposts and fees imposed
by any Governmental Authority (domestic or foreign) of any nature,
including but
not limited to federal, state, local or foreign net income
tax, alternative
or
add-on minimum tax, profits or excess profits tax, franchise tax, gross income,
adjusted gross income or gross receipts tax, employment related tax (including
employee withholding
or employer payroll
tax, FICA or FUTA),
real or personal
property tax or ad valorem tax, sales or use tax, excise tax, stamp
tax or duty,
any withholding
or back up withholding
tax, value added tax, severance tax,
prohibited transaction
tax, premiums tax, occupation tax, together with any
interest or any penalty, addition to tax or additional amount imposed by any
Governmental Authority
(domestic or foreign)
responsible for the imposition of
any such tax.
2. Purchase and Sale of Membership Interests.
(a) General.
At the LLC Closing (as
defined below) and
upon
the terms and
conditions
set forth in this Agreement, Micron shall sell,
transfer and assign to
Photronics, and
Photronics
shall purchase and
acquire
from Micron, the
Transferred Units,
free and clear of all security interests,
claims, liens,
pledges, options,
encumbrances,
charges, agreements, voting
trusts, proxies and other arrangements or restrictions whatsoever,
except as may
be set forth in this
Agreement and the LLC
Operating Agreement. Capitalized
terms used, but not
defined, in this Agreement, shall have the meanings set
forth in the LLC Operating Agreement.
(b) Purchase Price.
The total purchase price to be paid by
Photronics for the Units will be $63,000,000 (the "Purchase
Price").
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**** Material omitted
pursuant to a request
for confidential
treatment under
Rule 24b-2 of the
Exchange Act of 1934.
Material filed separately with the
Securities and Exchange Commission.
<PAGE>
(c) Closing;
Subsequent
Payments. Subject to the terms and
conditions contained
in this Agreement, the purchase and sale of the Units
hereunder (the "LLC
Closing" and together with the Contribution Closing, the
"Closing") shall take place immediately following the Contribution
Closing at
the offices of Micron at the opening of business on May 5, 2006 (the
"Closing
Date"), or at such other place or on such other date as is mutually
agreeable to
Micron and Photronics. [****]. In addition, Photronics shall make
two additional
payments to Micron in payment for the balance of the Purchase
Price by delivery
to Micron, by wire
transfer of
immediately available
funds to a bank
account
designated in writing by Micron, of an amount equal to $7,500,000, on each of
the first and second anniversaries of the Closing Date.
3. Closing Conditions.
(a) The obligation of Micron to sell, transfer and assign the
Units to Photronics
hereunder is subject to the satisfaction of the following
conditions as of the Closing:
(i) the representations and warranties contained in Section
4 hereof shall be true and correct in all material respects at and as
of the date hereof and
at and as of the
Closing Date as though
then
made, except to the
extent of changes caused by the transactions
expressly contemplated herein;
(ii) Micron shall have received the portion of the Purchase
Price payable to Micron at the Closing pursuant to Section 2
above;
(iii) The agreements and covenants of Photronics contained
in this Agreement that are required to be performed prior to or on the
Closing Date shall have been performed or satisfied by
Photronics
in
all material respects;
(iv) Consummation of the transactions contemplated hereby
and by the Transaction
Documents shall not have been restrained,
enjoined or otherwise prohibited by Applicable Law or order of
judgment
or any Governmental Authority (as defined in the LLC Operating
Agreement); and
(v) Micron and
Photronics shall have
entered into the LLC
Operating Agreement
and the other Transaction Documents, and such
agreements shall be in full force and effect.
(b) The obligation
of Photronics to
purchase and acquire the
Units from Micron is subject to the satisfaction of the following
conditions as
of the Closing:
(i) the representations and warranties contained in Section
4 hereof shall be true and correct in all material respects at and as
of the date hereof and
at and as of the
Closing Date as though
then
made, except to the
extent of changes caused by the transactions
expressly contemplated herein;
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**** Material omitted
pursuant to a request
for confidential
treatment under
Rule 24b-2 of the
Exchange Act of 1934.
Material filed separately with the
Securities and Exchange Commission.
<PAGE>
(ii) The agreements
and covenants of
Micron contained
in
this Agreement
that are required to
be performed
prior to or on the
Closing Date shall
have been performed
or satisfied by Micron
in all
material respects;
(iii) The Contribution shall have occurred;
(iv) Consummation of the transactions contemplated hereby
and by the Transaction
Documents shall not have been restrained,
enjoined or otherwise prohibited by Applicable Law or order of
judgment
or any Governmental Authority; and
(v) Micron and
Photronics shall have
entered into the LLC
Operating Agreement
and the other Transaction Documents, and such
agreements shall be in full force and effect.
4. Representations
and Warranties of Micron. Micron hereby
represents and warrants to Photronics as follows:
(a) Organization.
Each of Micron and the Company is duly
organized, validly
existing and in good standing under the laws of its
jurisdiction of formation. Micron has all corporate power and
authority required
to conduct
its business as currently conducted and to own and lease its
properties and operate its business as currently owned, leased and
operated. The
Company has all
limited liability company power and authority required to
conduct its business as currently conducted and to own and lease its
properties
and operate its business as currently owned, leased and operated.
Each of Micron
and the Company is duly qualified to do business and is in good
standing (to the
extent such
concept exists in the relevant jurisdiction) as a foreign
corporation or limited liability company, as applicable, in each jurisdiction
where the character of the property owned or leased or the nature of its
activities makes such qualification necessary, except for those jurisdictions
where the failure to
be so qualified
or in good
standing is not reasonably
likely to result in a Material Adverse Effect on Micron or the
Joint Venture, as
applicable. A
"Material Adverse Effect" on a Person (as defined in the LLC
Operating Agreement)
or business shall mean
any facts or
circumstances
that,
individually or in the
aggregate, would,
or might reasonably be expected to,
result in a material
adverse effect on the
business, financial condition or
results of operations of such Person or business.
(b) Ownership. All of
the Membership Interests of the Company
are owned by Micron, and Micron has good and marketable title to
such Membership
Interests, which
consists of 100,000 units, free and clear of all security
interests, claims, liens, pledges, options, encumbrances, charges, agreements,
voting trusts, proxies and other arrangements or restrictions
whatsoever.
(c) Authorization.
Micron has all
requisite corporate
power
and corporate authority to execute and deliver this Agreement, to
perform all of
its obligations and
undertakings hereunder
and to consummate the
transactions
contemplated hereby.
The execution and
performance
of this Agreement and
the
sale of the Units by
Micron to Photronics
have been duly authorized by all
necessary action
on the part of
Micron, and this Agreement has been duly
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**** Material omitted
pursuant to a request
for confidential
treatment under
Rule 24b-2 of the
Exchange Act of 1934.
Material filed separately with the
Securities and Exchange Commission.
<PAGE>
authorized, executed and delivered by Micron and constitutes a
valid and legally
binding obligation of Micron, enforceable in accordance with its
terms, except
as the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
the enforcement
of creditors' rights generally and general equitable
principles.
(d) Conflicts. The execution, delivery and performance of this
Agreement by Micron or the Company does not conflict with,
violate or result
in
the breach of, or create any lien or encumbrance on the Transferred Assets or
the Membership
Interests of the
Company pursuant to,
any charter,
agreement,
instrument, order,
judgment, decree, law or governmental
regulation to
which
Micron is a party or
is subject
or by which
the Transferred Assets or the
Membership Interests
of the Company are
bound. The
execution,
delivery and
performance of this Agreement does not and will not require any
governmental or
other third party consents or filings on the part of Micron or the
Company.
(e) Transferred
Assets. [****].
The Company has,
except for
Permitted Exceptions,
(i) good and
marketable title to, and possession of, all
of the owned
Transferred Assets
that are real property and (ii) good and valid
title to all of the owned Transferred Assets that are not real
property. All of
the Transferred Assets are in good operating condition and repair,
ordinary wear
and tear and immaterial defects excepted. The Company has no assets other
than
the Transferred Assets and the rights under the Technology License
Agreement (as
defined in the LLC Operating Agreement).
(f) Litigation. To
Micron's Knowledge,
there is no
material
Proceeding pending
or threatened against, relating to or affecting the
Transferred Assets or the transactions contemplated by this
Agreement. "Micron's
Knowledge" and the
related term "Known by Micron" shall mean the actual
knowledge of the
executive officers of Micron, after due inquiry of the
operating officers
of Micron and the Company. "Proceeding" shall mean any
action, suit,
hearing,
arbitration,
proceeding
(public
or private),
investigation, examination, audit or claim.
(g) Environmental
Matters. Excep
